Rules for the Conduct of Commercial Arbitrations of the Institute of Arbitrators and Mediators Australia (1999)

AUTHORITY FOR RULES

The Council of the Institute of Arbitrators
& Mediators Australia resolved at a meeting on 13 August 1999
that, where parties have agreed between them that a dispute arising
or having arisen between them shall be submitted to arbitration in
accordance with:

1. The Institute of Arbitrators &
Mediators Australia Rules for the Conduct of Commercial
Arbitrations; or

RULE 1 - Nomination of
Arbitrators

1. Nomination of arbitrators shall be by the
Institute, which may, in the exercise of its powers, delegate its
power of nomination to the person acting as:

a. the President; or

b. the Chairman of any State or Territory
Chapter.

2. Nothing in these Rules shall prevent the
parties to a dispute from agreeing on an arbitrator or arbitrators
of their choice.

RULE 2 - Notice of
Dispute

1. This Rule applies to the extent that it is
not inconsistent with the Agreement (as defined in Rule
16).

2. If a dispute or difference arises of a
kind covered by the submission to arbitrate in the Agreement, any
party to the dispute and the Agreement may give written notice
thereof to the other party or parties to the dispute and the
Agreement.

3. The notice (hereafter referred to as the
Notice of Dispute) shall be served at the address for such party or
parties specified in the Agreement. Unless
otherwise provided in the Agreement, service may be effected
personally, by mail, or by facsimile or other means of
telecommunication or electronic
transmission.

4. Ten (10) days after service of the Notice
of Dispute or deemed receipt of same, then such dispute or
difference, unless settled, shall be and is hereby referred to
arbitration in accordance with these Rules.

5. If the parties agree in writing that the
giving of notice under this Rule shall not be required, then the
parties may jointly call for nomination of an arbitrator by the
Institute in accordance with paragraph 2 of Rule
4.

RULE 3 - Nomination Fee

1. The party giving a Notice of Dispute shall
also provide evidence that it has deposited with the Institute of
Arbitrators & Mediators Australia the prescribed Nomination
Fee.

2. If the parties agree in writing that the
giving of notice under Rule 2 shall not be required then, unless
the parties otherwise agree, they shall jointly deposit with the
Institute of Arbitrators & Mediators Australia the prescribed
Nomination Fee.

3. The Nomination Fee shall be the sum of
$250.00 or such other sum as prescribed by the Institute from time
to time.

4. Lodgement of the prescribed Nomination Fee
shall be a pre-requisite to the nomination of an arbitrator under
Rule 4.

RULE 4 - Call for
Nomination

1. Where a Notice of Dispute has been given
pursuant to the Agreement or pursuant to Rule 2, and such dispute
has not been settled within the time provided, any party may
thereafter request the Institute in writing to nominate an
arbitrator and, in so doing, shall submit the following to the
Institute:

a. a copy of the Notice of
Dispute;

b. a copy of the Agreement containing the
submission to arbitration;

c. the names and addresses of the parties to
the dispute;

d. a brief description of the nature of the
dispute containing such particulars of the dispute as will permit
the Institute to nominate an appropriate arbitrator.

2. If the parties agree in writing that the
giving of notice under Rule 2 shall not be required then, in
addition to the material referred to in paragraph 1 of this Rule,
they shall provide to the Institute of Arbitrators & Mediators
Australia a copy of their written agreement to that
effect.

3. Within ten (10) days after receipt of the
material submitted pursuant to paragraphs 1 or 2 of this Rule, or
such further information as to the nature of the dispute as the
Institute may reasonably require for the purposes of nomination,
the Institute shall nominate an arbitrator and advise the parties
and the Nominee Arbitrator accordingly.

4. Unless the Agreement otherwise provides,
upon receiving a Call for Nomination, the Institute shall nominate
one arbitrator only.

RULE 5 - Entry on Reference to
Arbitration

1. The Nominee Arbitrator shall, within seven
(7) days of receiving advice of his or her nomination or agreed
appointment, give written notice to the parties of the time and
place of a Preliminary Conference which the parties or their duly
authorized representatives shall attend. At or prior to that
Preliminary Conference, the Nominee Arbitrator may advise any
conditions he or she wishes to impose (including provision of
security for the fees and expenses of the Nominee Arbitrator) and
request the agreement of the parties to such conditions and to his
or her jurisdiction to determine the matter referred.

2. On the parties agreeing to any such
conditions, the Nominee Arbitrator shall accept appointment and
shall then be deemed to have entered on the reference as
Arbitrator.

3. If any party fails to attend the
Preliminary Conference or does not agree with the conditions or
jurisdiction of the Nominee Arbitrator, then the Nominee Arbitrator
shall notify the parties and the Institute in writing within two
(2) days as to whether he or she accepts appointment as Arbitrator
notwithstanding that disagreement. On acceptance of appointment,
the Nominee Arbitrator shall be deemed to have entered on the
reference as Arbitrator. If appointment is
declined by the Nominee Arbitrator, then the Institute shall within
ten (10) days nominate a replacement Nominee Arbitrator.

RULE 6 -Nominee Arbitrator Failing to Act /
Loss of Arbitrator

Unless the parties otherwise agree in writing
or a Court otherwise orders, the Institute shall nominate a
replacement arbitrator, within ten (10) days of being called on to
do so by a party, if:

1. a Nominee Arbitrator does not enter upon
the reference to arbitration within one (1) month of the date of
his or her nomination;

2. after entering on the reference to
arbitration, an Arbitrator shall die or shall otherwise become
incapable by reason of ill health or otherwise, or be debarred in
law, from continuing on the reference to arbitration.

RULE 7 - Liability of Institute for acts or
omissions

The parties agree that the Institute of
Arbitrators & Mediators Australia its officers and employees
are not liable to any party for or in respect of any act or
omission in the discharge or purported discharge of the Institute's
functions under these Rules unless such act or omission is shown to
have been fraudulent.

RULE 8 - Provision of Security

The Arbitrator may direct that the parties
provide security for the costs of the reference in such form, such
amount or amounts and at such time or times as directed by the
Arbitrator. Any such security shall be deposited
and applied as directed by the Arbitrator. If
there is any default in provision of security as directed by the
Arbitrator, then the Arbitrator may make such directions for the
further conduct of the arbitration as the Arbitrator then considers
appropriate.

PART II - THE ARBITRAL
PROCEDURE

RULE 9 - Preliminaries not to Prejudice
Scope of Arbitration

Unless otherwise agreed in writing by the
parties:

1. Any description identifying a claim given
in a Notice of Dispute under Rule 2 or by way of description in
accordance with Rule 4 shall not be taken as defining or limiting
the scope of the arbitration.

2. Any party may raise in its claim, defence,
cross claim or defence to cross claim, any other dispute or
difference which has arisen under the Agreement.

3. Thereafter any amendment or addition to
claims will be in the discretion of the Arbitrator, and shall be
subject to any conditions as to costs or otherwise that the
Arbitrator may consider appropriate.

RULE 10 - General Duty of
Arbitrator

1. The Arbitrator shall adopt procedures
suitable to the circumstances of the particular case, avoiding
unnecessary delay and expense, so as to provide an expeditious
cost-effective and fair means of determining the matters in
dispute.

2. The Arbitrator shall be independent of,
and act fairly and impartially as between the parties, giving each
party a reasonable opportunity of putting its case and dealing with
that of any opposing party, and a reasonable opportunity to be
heard on the procedure adopted by the
Arbitrator.

RULE 11 - General Duty of
Parties

1. The parties shall do all things reasonably
necessary for the proper, expeditious and cost-effective conduct of
the arbitral proceedings.

2. Without limiting the generality of the
foregoing, the parties shall comply without delay with any
direction or ruling by the Arbitrator as to procedural or
evidentiary matters and shall, where appropriate, take without
delay any necessary steps to obtain a decision of a Court on a
preliminary question of jurisdiction or law.

RULE 12 - Waiver of Right to
Object

1. Subject to any Statute Law or principle of
common law or equity, or prior written agreement of the parties, if
a party to arbitral proceedings takes part, or continues to take
part, in those proceedings without making forthwith or within a
reasonable time thereafter any objection:

a. that the Arbitrator lacks substantive
jurisdiction;

b. that the proceedings have been improperly
conducted,

c. that there has been a failure to comply
with the Agreement; or

d. that there has been any other irregularity
affecting the Arbitrator or the proceedings,

then that party shall be deemed to have
waived its right to make such objection later, before the
Arbitrator or a Court, unless it shows that, at the time it took
part or continued to take part in the proceedings, it did not know
and could not with reasonable diligence have discovered the grounds
for the objection.

2. Subject to any Statute Law or prior
written agreement of the parties, where the Arbitrator rules that
he or she has substantive jurisdiction and a party to arbitral
proceedings who could have questioned that ruling in a Court does
not do so within any time fixed by the Arbitrator (or if no time is
fixed, within a reasonable time and not later than the conclusion
of any hearing), then that party shall be deemed to have waived any
right it may otherwise have had to later object to the Arbitrator's
substantive jurisdiction on any ground which was the subject of
that ruling, and shall be deemed to have
submitted to the Arbitrator's
jurisdiction.

RULE 13 - Procedural Directions

1. Subject to any Statute Law or prior
written agreement of the parties, and the requirements of Rule 10,
the Arbitrator shall make such directions or rulings in respect of
procedural and evidentiary matters as he or she sees
fit.

2. Subject to any agreement of the parties to
the contrary, and without limiting the generality of the
foregoing:

a. unless the arbitration is to be conducted
in accordance with The Institute of Arbitrators & Mediators
Australia Expedited Commercial Arbitration Rules, the provisions of
Schedule 1 shall apply;

b. where the arbitration
is to be conducted in accordance with The Institute of Arbitrators
& Mediators Australia Expedited Commercial Arbitration Rules,
the provisions of Schedule 2 shall apply.

RULE 14 - Views and Other
Material

1. The Arbitrator may, in his or her
discretion, view the subject matter or site of any dispute, the
view of which might assist the Arbitrator in determining the issues
in dispute. The Arbitrator may use his or her
own observation not merely to assist in understanding the evidence
but also as material which he or she may use in determining the
issues in dispute provided that, in so doing, the Arbitrator puts
the parties on notice of any preliminary adverse conclusion which
is based solely on the Arbitrator's observations on the view and
then affords such parties a reasonable opportunity to meet
it.

2. Subject to any Statute Law or contrary
agreement of the parties, the Arbitrator shall be at liberty to
obtain such technical and/or legal assistance or advice as the
Arbitrator may, in his or her discretion, reasonably require
provided that, in so doing, the Arbitrator complies with the rules
of natural justice. The costs or expenses of so
doing shall form part of the Arbitrator's fees and expenses of the
arbitration.

RULE 15 - Awards

1. Subject to any Statute Law or the
Agreement, the Arbitrator shall within a reasonable time deliver
one or more interim awards so as to deal with all issues in the
arbitration except for the costs of the arbitration.

2. Thereafter, at the time and in the manner
directed by the Arbitrator, the parties shall place before the
Arbitrator such evidence and submissions on which they respectively
rely on the question of costs, and the Arbitrator shall as soon as
reasonably practicable thereafter deliver a final award which
includes the Arbitrator's determination on costs, including by whom
and in what manner the whole or any part of the costs of the
arbitration are to be paid.

3. Awards of the Arbitrator shall be made in
writing, and either forwarded by mail to the successful party (and
a signed copy thereof shall be forwarded to the other party or
parties) or the Arbitrator may advise the parties that the award
may be collected at some place nominated by the
Arbitrator.

4. In the event that security moneys lodged
are less than that which the Arbitrator determines as the
Arbitrator's fees and expenses and any other amounts to be paid
from that security, then the Arbitrator may withhold the award
until a party pays the outstanding balance so determined by the
Arbitrator, whereupon such party may collect the award.

PART III -
GENERAL

RULE 16 - Definitions

In these Rules:

'The Institute' means the Council of the
Institute of Arbitrators & Mediators Australia.

'Agreement' means any agreement between the
parties embodying a submission of present or future disputes to
arbitration.

'Arbitrator' means an arbitrator who has
entered on the reference to arbitration.

'the costs of the arbitration' includes the
costs of the reference and the costs and disbursements of the
parties.

'the costs of the reference' includes the
fees and expenses of an Arbitrator or Nominee Arbitrator, any
Nomination Fee or other fee payable to the Institute of Arbitrators
& Mediators Australia, the costs of room hire or transcript,
and any fees or expenses pursuant to paragraph 2 of Rule
14.

'Court' means any Court which has
jurisdiction under the Statute Law which governs arbitration in the
place where the arbitration is held.

'days' means normal working days and shall
exclude Saturdays, Sundays and public holidays.

'domestic arbitration' means any arbitration
which is not an international arbitration.

'international arbitration' means arbitration
where one or more of the parties to the Agreement does not carry on
business within the Commonwealth of Australia.

'Nominee Arbitrator' means an arbitrator who
has been nominated by the Institute or agreed by the parties but
who has not entered on the reference to arbitration.

'the UNClTRAL Rules' means the Arbitration
Rules as adopted by the United Nations Commission on International
Trade Law at its Ninth Session in 1976 and recommended by the
General Assembly of the United Nations on 9 December 1976 as are in
force at the time of commencement of the arbitral process under
these Rules.

RULE 17 - Application of Rules

1. These Rules are subject to the Statute Law
which governs arbitration in the place where the arbitration is
held and to any agreement between the parties in relation to the
arbitration process. Otherwise where the parties to a dispute have
agreed to arbitration in accordance with these Rules, they are
thereby bound to comply with these Rules.

2. These Rules shall apply to domestic
arbitrations and, subject to Rule 21, to international
arbitrations.

RULE 18 - Counting of Days

1. For the purpose of counting days under
these Rules, such period shall begin to run on the day following
the day when notice, notification, communication or proposal is
actually received or deemed to be received under paragraph 2 of
this Rule, whichever is earlier. If the last day
of such period is a public or official holiday or a non-business
day at the residence or place of business of the addressee, then
the period is extended until the first business day which
follows.

2. Any such notice, notification,
communication or proposal which is posted is deemed to have been
received on the second day following the day of posting. Any such
notice, notification, communication or proposal which is sent by
facsimile or other means of telecommunication or electronic
transmission is deemed to have been received on the day of
transmission.

RULE 19 - Multiple Arbitrators - Appointment
of Umpire

1. Where there is more than one Arbitrator
then, where the context requires it, references
in these Rules to an Arbitrator shall be read as a reference to the
Arbitrators and, subject to Rule 20, to any umpire who is
appointed.

2. Subject to the operation of any applicable
Statute Law, where there is an even number of Arbitrators, those
Arbitrators may thereafter appoint an umpire, and shall do so if
the Arbitrators fail to agree on any matter for
determination.

3. If the Arbitrators are unable to agree on
the identity of the umpire within seven (7) days of their
disagreement, then they shall notify the parties accordingly in
writing, and any party may then make a written request to the
Institute to nominate an umpire. The Institute shall within ten
(10) days thereafter nominate an umpire and advise the parties, the
Arbitrators and the nominated umpire accordingly.

RULE 20 - Determination by an
Umpire

1. Where an umpire is appointed pursuant to
Rule 19 and the Arbitrators fail to agree on any matter for
determination, then the Arbitrators shall provide the umpire with a
written statement of the points of agreement and points of
disagreement, but without reasons, together with all other written
material relevant to the arbitration including exhibits and items
marked for identification but excluding private notes of the
Arbitrators.

2. The Arbitrators shall provide the material
referred to in the preceding paragraph to the umpire within a
period of seven (7) days of written notice by the umpire that he or
she has accepted nomination as umpire or seven (7) days of their
disagreement, whichever be the later. The
Arbitrators shall, by the same time, provide copies of their
written statement of the points of agreement and points of
disagreement to the parties.

3. Unless otherwise agreed by the parties in
writing, the umpire shall then proceed to deliver an award as soon
as reasonably practicable and, in so doing, shall take into account
the evidence before the Arbitrators but shall not be bound by any
of the points of agreement expressed by the Arbitrators, and no
further evidence shall be led before the umpire unless the umpire
considers it appropriate.

RULE 21 - International
Arbitrations

1. The UNClTRAL Rules shall apply to any
international arbitration under these Rules.

2. The provisions of Rules 1 to 20 inclusive
shall also apply to any international arbitration under these Rules
to the extent that any such Rule or Rules are not inconsistent with
the UNCITRAL Rules which shall prevail to the extent of any
inconsistency.

3. The appointing body referred to in Article
6 of the UNCITRAL Rules shall be the Institute which may, by
resolution of Council and in accordance with the Memorandum and
Articles of Association of the Institute of Arbitrators &
Mediators Australia, delegate the power of appointment to the
President for the time being or the person so acting.

SCHEDULE 1

The Arbitrator may make such directions or
rulings as he or she considers to be reasonably appropriate,
including in respect of the following:

1. The form and extent of any pleadings or
other documents defining the issues in dispute, including the
extent to which particularisation should be provided by a party in
respect of its contentions on all or some of the issues in
dispute.

2. The preparation of any joint statement of
issues, in such manner and at such time as the Arbitrator considers
appropriate, to define and narrow the issues in dispute.

3. The holding of further Preliminary
Conferences, meetings between experts and/or representatives of the
parties, or Experts' Conclaves chaired by the Arbitrator, so as to
narrow issues in dispute, including the time at which and manner in
which they are conducted and who may attend, and preparation of any
written document recording the results thereof.

4. The preparation of joint reports by
experts engaged by the parties following any meetings between such
experts or any Experts' Conclave, recording the matters on which
they agree, the matters on which they disagree, and identifying the
reasons for any such disagreement and their respective contentions
in relation to same.

5. The preparation of joint bundles of
documents for use in the arbitration, including at any meetings
between experts and/or representatives of the parties and any
Experts' Conclaves, or preparation of any joint report of
experts.

6. The provision of factual information to
experts for the parties for use in their joint deliberations or
preparation of any joint report.

7. The manner in which and the extent to
which the parties shall produce documents for inspection by any
opposing party.

8. The form of any evidence in chief, by
witness statement or otherwise, and the time or times at which it
is to be provided to the Arbitrator and any other party.

9. The extent to which an oral hearing is
required and any limitations in relation to same, including
reasonable time limits on oral evidence and the provision of
written opening addresses and final submissions.

10. The service of offers of settlement
without prejudice except as to costs.

SCHEDULE 2

The arbitration shall be conducted in the
following manner:

1. The claimant shall, within twenty one (21)
days of the date on which the Arbitrator enters on the reference
pursuant to Rule 5, provide the following to each other party and
to the Arbitrator:

a. a statement in writing detailing the
nature of the dispute, the legal and factual issues involved, its
contentions in relation to those issues, and the quantum of its
claim;

b. all statements of evidence and copies of
all documents on which it relies;

c. any expert reports on which it
relies;

d. its written submissions on the legal and
factual issues involved in its claim.

2. Thereafter, each party other than the
claimant shall, within a further period of twenty one (21) days,
provide the following to each other party and to the
Arbitrator:

a. a statement in writing indicating whether
or not it agrees with the claimant's written statement pursuant to
paragraph 1a and, if not, its statement of the nature of the
dispute (including any cross claim pursuant to Rule 9), the legal
and factual issues involved in the claimant's claim and any such
cross claim, its contentions in relation to those issues, and the
quantum of any such cross claim;

b. all statements of evidence and copies of
all documents on which it relies;

c. any expert reports on which it
relies;

d. any objections which it has to the
statements of evidence, experts reports, and documents served by
the claimant, detailing the basis of any such objection;

e. its written submissions on the legal and
factual issues involved in the claimant's claim and any cross claim
brought by it.

3. Thereafter, any party may reply to written
material served pursuant to paragraph 2, within a further period of
twenty one (21) days, by providing the following to each other
party and to the Arbitrator:

a. a statement in writing in reply indicating
whether or not it agrees with the written statement pursuant to
paragraph 2a and, if not, its reply as to the nature of the
dispute, the issues likely to arise and its contentions in relation
to same;

b. all statements of evidence and copies of
documents in reply to material served pursuant to paragraph
2b;

c. any expert reports in reply to material
served pursuant to paragraph 2c;

d. any objections which it has to the
statements of evidence, experts reports, and documents served
pursuant to paragraph 2b, detailing the basis of any such
objection;

e. its written submissions in reply on the
legal and factual issues involved.

4. If a cross claim is made in accordance
with paragraph 2, then the cross claimant may reply, in the same
manner as set out in paragraph 3, to written material served in
respect of such cross claim pursuant to paragraph 3.

5. If the Arbitrator considers it
appropriate, he or she may direct that expert reports not be served
in accordance with paragraphs 1c, 2c, 3c and 4 above and that,
instead, the experts retained by the parties are to be each
provided with the material otherwise served pursuant to paragraphs
1, 2, 3 and 4, and then jointly confer (by a time fixed by the
Arbitrator) and produce a joint report or reports (by a time fixed
by the Arbitrator) recording the matters on which they agree, the
matters on which they disagree, and identifying the reasons for any
such disagreement and their respective contentions in relation to
same.

6. If the Arbitrator considers it
appropriate, he or she may direct that the experts retained by the
parties attend one or more Experts' Conclaves chaired by the
Arbitrator, so as to narrow issues in dispute, which Conclaves are
to be held at a time and are to be conducted and recorded in a
manner directed by the Arbitrator.

7. The Arbitrator may make such other
directions or rulings as he or she considers to be reasonably
appropriate, including directions or rulings in terms as provided
in paragraphs 1, 2, 3, 5, 6, 7 and 10 of Schedule 1.

8. Thereafter the Arbitrator shall determine
the matter based on the written material served or produced
pursuant to this Schedule 2 unless the Arbitrator determines that
an oral hearing is necessary to explain or resolve conflicts in
that written material in relation to any one or more of the issues
in dispute.

9. If the Arbitrator determines that an oral
hearing should be held in relation to any one or more of the issues
in dispute, then that oral hearing shall be conducted as soon as
practicable at a time and in the manner directed by the Arbitrator,
including any reasonable time limits on oral evidence and the
provision of written opening addresses and final
submissions.

10. Any times fixed pursuant to this Schedule
2 may be varied by agreement of the parties. In
the absence of such agreement, on proper cause being shown by a
party, the Arbitrator may vary the times fixed on such terms as to
costs or otherwise as the Arbitrator, in his or her discretion,
considers reasonable in the circumstances.